The transfer of shares in a limited liability company may be effected by sale or inheritance. A company cannot altogether avoid the possibility of transferring shares, but corresponding restrictions can be noted in its articles of association. With its aspects relevant to German corporate and tax law, the transfer of shares is part of the daily routine of a corporate lawyer. However, there are some crucial aspects to be taken into account when structuring the transfer to comply with all formalities and ensure the best possible result from a tax point of view.
The German law firm Schlun & Elseven offers competent and committed legal assistance to provide our clients with the support they need. Our German corporate lawyers will advise you on all matters relating to the transfer of shares in a company. If you need our legal support, please do not hesitate to contact our law firm directly.
Due Diligence Services
If you are considering purchasing shares and getting involved with a particular company, then due diligence should be regarded as a requirement. This due diligence allows you to evaluate a risk assessment on that company and to identify potential risks involved with the purchase.
At Schlun & Elseven Rechtsanwälte, our legal experts carry out extensive due diligence. We examine the company from multiple angles, including its legal due diligence (supply contracts, customer contracts, licenses, leases and organisational documents), IP due diligence (patents, trademarks, copyrights, utility models and other intellectual property) and red flag due diligence (a less in-depth analysis that focuses on identifying the most significant risks).
Our lawyers will prepare a due diligence checklist for the company in question and ensure that it is tailored to your requirements. Our due diligence service will ensure that you have a clearer understanding of the business’s true worth and whether purchasing those shares is recommendable.
Under German law, shares in a German limited liability company (GmbH) are permitted to be sold to companies based in other countries. However, specific requirements need to be observed in such cases, as failing to do so can lead to a collapse in the deal.
Under German law, the notarization of the transfer of GmbH business shares is required, and to complete this transaction, the identity of the purchaser is necessary. The notary, therefore, must be sure of the existence of the other company. In Germany, the notary can examine the commercial register and thus locate the business registered office in Germany. However, this proof can be more challenging to obtain when it involves companies based abroad.
In some countries, there are bodies that are similar to the German commercial register, and therefore an extract from the foreign register can be submitted. However, it should be noted that the notary needs to understand the proof of existence; therefore, it should usually be in English or German. If it is unavailable in English, companies are best advised to avail of a certified German translation.
If the certification of the excerpt has been completed by a foreign authority/register, it may be necessary to have the document legalized. If the foreign state is part of the Hague Convention, this legalization can be carried out utilizing an apostille. At Schlun & Elseven Rechtsanwälte, our lawyers are available in legal matters concerning legalization and apostille. Parties applying for the apostille should do so in sufficient time to prevent any further legal complications.
Practice Group: German Corporate Law
Practice Group:
German Corporate Law
Contact our Lawyers for German Corporate Law
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